Commissioner of C. Ex. Vs. Montari Industries Ltd. - Court Judgment

Excerpt:

.....on certificate issued under rule 57e of the central excise rules, 1944 after six months of the date of issue of the said certificates?" 2. the brief facts of the case are that the respondents herein were engaged in the manufacture of insecticides and herbicides falling under chapters 28, 29 and 38 of the schedule to the ceta 1985. they were availing modvat facility. in the month of september, 1995, they were required to pay differential duty of rs. 1,02,247/- and on the strength of the certificate of payment, they took modvat credit in terms of rule 57e of the central excise rules. this was objected to by the department which issued a show cause notice dated 12-3-1996. the proceedings against the assessees were dropped by the additional commissioner; however, the commissioner (appeals) set aside the adjudication order and allowed the appeal of the revenue. the assessees filed an appeal to the tribunal which held that the limitation period under rule 57g(2) of the central excise rules for taking credit from 29-6-1995 does not operate with retrospective effect. the tribunal followed the larger bench decision in the case of telco v c.c.e., bombay [1996 (87) e.l.t.157] and set aside.....

Judgment:

1. The Revenue has filed the above application for reference of the following question of law stated to have arisen out of Tribunal's Final order No. A/533/99-NB, dated 29-6-1999 : "Whether CEGAT is justified in allowing credit on certificate issued under Rule 57E of the Central Excise Rules, 1944 after six months of the date of issue of the said certificates?" 2. The brief facts of the case are that the respondents herein were engaged in the manufacture of Insecticides and Herbicides falling under Chapters 28, 29 and 38 of the Schedule to the CETA 1985. They were availing modvat facility. In the month of September, 1995, they were required to pay differential duty of Rs. 1,02,247/- and on the strength of the certificate of payment, they took Modvat credit in terms of Rule 57E of the Central Excise Rules. This was objected to by the Department which issued a show cause notice dated 12-3-1996. The proceedings against the assessees were dropped by the Additional Commissioner; however, the Commissioner (Appeals) set aside the adjudication order and allowed the appeal of the Revenue. The assessees filed an appeal to the Tribunal which held that the limitation period under Rule 57G(2) of the Central Excise Rules for taking credit from 29-6-1995 does not operate with retrospective effect. The Tribunal followed the Larger Bench decision in the case of TELCO v C.C.E., Bombay [1996 (87) E.L.T.157] and set aside the impugned order and restored the order passed by the Additional Commissioner. Hence, this reference application.

3. On hearing both the sides and noting that there is no authoritative pronouncement by any High Court or the Apex Court on the legal question arising out of the Tribunal's final order, I am of the view that the question of law as framed by the Revenue requires to be referred to the jurisdictional High Court for its considered opinion. Hence, the following question of law is referred to the Hon'ble Punjab & Haryana High Court at Chandigarh.

"Whether CEGAT is justified in allowing credit on certificate issued under Rule 57E of the Central Excise Rules, 1944 after six months of the date of issue of the said certificates?" The Registry is directed to draw up the statement of case and forward the papers to the Hon'ble High Court.